Abandoning Revival Efforts
In a recent turn of events, the bankrupt cryptocurrency exchange FTX has opted to liquidate its assets in an effort to repay customers, setting aside any previous plans for a potential revival. This decision was confirmed by FTX’s legal representative during a court hearing in Delaware, marking a significant shift in the company’s strategy since its bankruptcy filing in November 2022.
The Road to Repayment
Despite the turmoil and legal entanglements following its collapse, FTX has managed to secure over $7 billion in assets with the aim of compensating its customers. This initiative has been coordinated with regulatory bodies, who have agreed to postpone their own claims against FTX, which amount to roughly $9 billion, until customers have been fully repaid.
Controversy Over Repayment Valuation
The method of calculating customer repayments has sparked controversy, as FTX has chosen to base the value on cryptocurrency prices from November 2022, a time when the market was notably depressed. This has led to dissatisfaction among some customers due to the subsequent rise in the value of various cryptocurrencies. Nevertheless, this approach has been upheld by U.S. Bankruptcy Judge John Dorsey, who pointed out the necessity of adhering to the Bankruptcy Code’s requirements.
Market Reaction and FTT Token Volatility
Following the announcement, there was a notable impact on the market, with FTX’s native token, FTT, experiencing a brief surge in value by over 11%, only to then plummet by 28% to a value of $2.30. This price fluctuation was documented by the cryptocurrency tracking platform CoinGecko.
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